OCI Partners (NYSE: OCIP) and Cabot (NYSE:CBT) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, institutional ownership and earnings.
This is a breakdown of current recommendations and price targets for OCI Partners and Cabot, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Risk and Volatility
OCI Partners has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500. Comparatively, Cabot has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500.
This table compares OCI Partners and Cabot’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
OCI Partners pays an annual dividend of $0.32 per share and has a dividend yield of 3.4%. Cabot pays an annual dividend of $1.26 per share and has a dividend yield of 2.0%. OCI Partners pays out 114.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cabot pays out 128.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cabot has raised its dividend for 6 consecutive years. OCI Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares OCI Partners and Cabot’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|OCI Partners||$343.33 million||2.36||-$50.55 million||$0.28||33.21|
|Cabot||$2.72 billion||1.41||$241.00 million||$0.98||63.30|
Cabot has higher revenue and earnings than OCI Partners. OCI Partners is trading at a lower price-to-earnings ratio than Cabot, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
14.0% of OCI Partners shares are owned by institutional investors. Comparatively, 85.5% of Cabot shares are owned by institutional investors. 2.5% of Cabot shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Cabot beats OCI Partners on 12 of the 17 factors compared between the two stocks.
About OCI Partners
OCI Partners LP owns and operates an integrated methanol and ammonia production facility that is located on the Texas Gulf Coast near Beaumont. The Company has an annual methanol production capacity of approximately 912,500 metric tons and an annual ammonia production capacity of approximately 331,000 metric tons. It purchases natural gas from third parties and processes the natural gas into synthesis gas, which it then further processes in the production of methanol and ammonia. It stores and sells the processed methanol and ammonia to industrial and commercial customers for further processing or distribution. Its methanol production unit comprises Foster-Wheeler-designed twin steam methane reformers for synthesis gas production, over two Lurgi-designed parallel low-pressure, water-cooled reactors and approximately four distillation columns. The Haldor-Topsoe-designed ammonia synthesis loop at its facility processes hydrogen produced by methanol production process.
Cabot Corporation is a global specialty chemicals and performance materials company. The Company operates through four business segments: reinforcement materials, performance chemicals, purification solutions and specialty fluids. Reinforcement materials’ rubber grade carbon blacks are used to enhance the physical properties of the systems and applications in which they are incorporated. Its rubber blacks products are used in tires and industrial products. Performance Chemicals consists of two businesses: specialty carbons and formulations business, and metal oxides business. Purification Solutions’ activated carbon products are used for the purification of water, air and pharmaceuticals, among others, as either a colorant or a decolorizing agent in the production of food and beverage applications. Its specialty fluids segment produces and markets cesium formate as a drilling and completion fluid for use in high pressure and high temperature oil and gas well construction.
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